How To Prep Your Small Business Finances For The Unexpected


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No matter what creative industry you’re in, being a small business owner is tough. There’s always going to be an element of financial stress for photographers, videographers, and designers. Margins are small, and a few bad months can leave a massive dent in your savings. Or worse, cripple you completely.

That’s why it’s vital that any small business owner takes the time to plan for the unknown and has a financial backup plan.

Waiting for a crisis to hit is too late to act.

You need to have a plan in place that covers as many possibilities or outcomes as you can possibly think of. It’s also critical to ensure that you practice good financial habits at all times. This way, when the unexpected arises, it’s not a monumental disaster.

Prepare For The Worst And Hope For The Best

With just about any aspect of life, knowing what the worst possible outcome is can help you to prepare for anything. It may seem like a depressing way of looking at the world, but it can save your small business from shutting up shop when something like a global pandemic occurs.

Read also about How to master Product Photography

Being creative, you’ll know how to pour your energy into your work. Sometimes, you need to apply your creative skills elsewhere. Now is the time to move from behind the lens or drawing board and consider the operational side of and what it takes to stay afloat.

To get your business and yourself properly prepared, follow these steps:

Understand That Not Everything Is In Your Control

women working on small business
Understand that not everything is in your control

This is one of the hardest things to acknowledge and accept when running a small business. You try so hard to control things to ensure that your business succeeds, but you can’t always plan for every eventuality.

People will behave in ways that you don’t expect, which can change your market suddenly and impact your sales. External elements like natural disasters or a pandemic can immediately change your ability to trade.

What you need to do is focus on what you can control. This includes your business finances and ensuring you have a safety net in place for when things that you can’t control strike. Knowing that you are prepared to weather external storms can give you peace of mind.

Keep Tabs On Your Assets And Inventory


Now, you can get onto taking practical steps to ensure that your business survives and hopefully prospers when bad times come around. The first thing you want to know is what your business has in terms of assets.

This can be inventory of the products you sell or use to provide a service, as well as any equipment, machinery, or technology you own. Your cameras, computers, printers, and editing software are all included. Your assets also include your bank balance and any investments you have.

All of these items can become liquid assets if you need to sell them off and free up cash for operations. It’s important to know that you can get access to a certain amount of money if you have a hard month and can’t cover rent or salaries due to poor turnover.

List Your Expenses In Order Of Priority

Next, look at what you spend your business money on. Some items you need to keep spending money on, like rental or the mortgage for your premises and your basic operational costs. Other items you don’t need to spend money on. These can include everything from Friday lunches for the entire office to gifts you’d send to clients. 

List all of your expenses in order of things you absolutely cannot cut down on through to things you could change or go without. There will be plenty of instances where you can cut down on costs—for example, switching to cheaper coffee or finding innovative ways to market your business on  shoestring.

You don’t need to make these cuts until there is an emergency situation. But it’s good to know where and how you can save on operational costs.

Keep Your Business In Good Credit

A good credit score can be a lifesaver in tough times. By ensuring that your business has a good credit rating, you can rest easy knowing that you can ask your bank or a lender for credit or a loan to help with operating costs.

It’s not always the best practice to fall back on borrowing money, but it often isn’t as bad as people make out. You just need to ensure you have a plan to use the money in a specific way and to pay it back.

Set Up A Billing System That You Can Follow


A big cash flow killer is ignoring or forgetting about invoices that aren’t paid on time.

When hard times hit, you need to know that you can monitor your invoices and incoming payments clearly. You also need to have a good idea of which clients pay well and who you need to sit on to get payment. If your billing system isn’t easy to follow, you could end up with some serious cash flow problems.

You may also want to consider including incentives for people to pay you on time, or even settle up early. You can reward good, loyal clients and push the slow payers with one little twist to your invoicing.

Offer small discounts on your invoice to encourage payments in a timeframe that suits you. For example, offer a 2% discount if the account is settled in 10 days or even a 10% discount if it’s settled immediately. You’ll know what your business can afford.

Watch The World Around You

Finally, you need to be constantly aware of what is happening in the world. There is no point in prepping your expenses and understanding your assets if you aren’t going to pay attention to economic and market changes.

Of course, you can’t predict everything that is going to happen, but you can look for trends and try to get ahead of changes that could hurt your business finances.

The Last Word

The creative industry is highly competitive and the pandemic and subsequent economic downturns haven’t made it easy to stay in business. Attaining success in a creative field and owning a business takes a mix of talent, grit and determination—and careful financial planning.

Set yourself up for success by future proofing your finances and you’ll have a much greater chance of ongoing success.

if you’re looking to increase your online conversion but still feel you are not sure where to start – check out these resources below:

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